How Are Trusts Taxed in Switzerland?

I am considering creating a trust for my daughter (who also lives in Switzerland) to ensure that she will still be provided for if anything happens to me. Because of her lifestyle, I feel a trust would be the best way to do this.

I would open the trust in the U.S., but before I do I would like to fund out how this would affect both of us from a tax point of view. Would she have to pay inheritance tax on the trust fund? Would the trust fund affect her tax bracket and possibly make her eligible to pay wealth tax?

Thanks and kind regards

Hi there,

moneyland.ch is not a tax advisory service. For detailed information specific to your situation, we recommend you consult a tax advisor who specializes in trusts.

As a general guideline, a trust fund created by a revocable trust or by an irrevocable discretionary trust is considered to be the property of the settlor (you in this case) for wealth tax purposes, while the trust fund created by an irrevocable trust is considered to be the property of the beneficiary (your daughter, in this case) for wealth tax purposes.

There is no Swiss federal tax on gifts or inheritances from parents to children, but some cantons and municipalities levy taxes on gifts and inheritances. Whether your daughter will be eligible to pay a gift or inheritance tax will depend on where she is resident when she receives the benefits provided by the trust fund.

Benefits received by the beneficiary from the trust are counted as taxable income and are subject to income taxes.

Best regards from Moneyguru

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